Companies wishing to become an operator for exploration activities under a production licence on the UK Continental Shelf require approval from the NSTA.
In most cases, companies seeking to become an Exploration Operator should apply for approval through the UK Energy Portal (PEARS) process.
The exception would be when an Exploration Operator is applied for and appointed as part of new production licence award in a Licensing Round for an Innovate Phase C or Straight to Second Term Licence.
NOTE Approval for an Onshore operator is a separate process. Further information on this can be found here.
An Exploration Operator (also sometimes referred to as a Licence, Block or Subarea Operator) is the company that carries out the various exploration operations under a production licence on behalf of the licence group. For these purposes ‘exploration’ means the drilling of exploration and/or appraisal wells. It does not include production of hydrocarbons or the drilling of development wells.
Approval covers a specific piece of acreage defined by a Licence Block and/or Subarea (as opposed to Field/Production Operatorship which relates to a specific field). Approval relates only to the operator’s competence and confers no permission to drill; for example, a separate well consent is required for each well.
Usually the Exploration Operator is one of the companies on the licence. The licence group will select the operator, but the model clauses attached to each licence provide that the choice must be approved by the NSTA. To drill development wells or develop/produce a field, a company needs to be approved as a Field/Production Operator.
NOTE A fee is charged for each individual Licence Block/Sub-area application. Further information on this can be found here.
As part of the Innovate Licence and as per the Stewardship Expectation ‘SE2 Delivering Exploration and Appraisal Work Programme’, Licensees are expected to have a licence Exploration Operator approved by the NSTA and appointed when transitioning into Phase C of the Initial Term (application to be submitted via the UK Energy Portal (PEARS).
NOTE In addition, for all Exploration well operations, the Offshore Petroleum Licensing (Offshore Safety Directive) Regulations 2015 (OSD) requires Licensees to appoint an OSD Well Operator. Further information on this and the process can be found here.
Requirements for Exploration Operators
For all Exploration Operatorship applications submitted through the UK Energy Portal (PEARS), the NSTA will look at the governance structure, systems and technical competence of the company to plan and perform offshore operations, and its capacity to ensure environmental protection. Please refer to Detailed requirements and checklist (MS Word). An up to date copy of this information should be uploaded with each application.
Since the Offshore Safety Act 1992, health and safety has not been a factor the NSTA checks when considering the competence of an operator; it is now wholly the responsibility of the Health and Safety Executive.